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Policy Outcomes of the

10th UK-China Economic and Financial Dialogue

The UK’s Chancellor of the Exchequer and Chinese Vice-Premier Hu Chunhua

concluded the 10th UK-China Economic and Financial Dialogue on 17 June 2019,

in London. They welcomed the 65th anniversary of the exchanging of Chargés

d’Affaires and reiterated their commitment to foster a global comprehensive

strategic partnership for the 21st Century. Both sides attach great importance to

the “Golden Era” of UK-China relations, agree to deepen strategic economic

collaboration, boost bilateral trade and investment, and deepen financial links,

and are committed to work together towards the UN sustainable development

goals, actively promoting equality and diversity, and creating a prosperous

society for all. Both sides are committed to supporting multilateralism, respect

international law and fundamental norms governing international relations with

the United Nations (UN) at its core. Both sides are committed to upholding the

UN Charter and international law, and all three pillars of the UN system, namely

peace and security, development, and human rights.

Both sides agreed that the Economic and Financial Dialogue had delivered

significant successes to the benefit of both economies over the past decade,

including: the UK joining the Asian Infrastructure Investment Bank (AIIB), the

establishment of an RMB clearing bank in London, the first ever issuance of a

Chinese sovereign bond outside of China in London, the launch of London-

Shanghai Stock Connect, the issuance of Panda Bonds by British banks, bilateral

cooperation in the fields of science and technology, joint investment into a

greener future including Hinkley Point C, electrical vehicles and offshore wind

power, as well as significant progress on boosting bilateral trade and investment.

The 10th dialogue marked wide ranging and positive progress in areas including

macroeconomic policies, trade, investment, finance, industrial strategies, Belt

and Road Initiative and third-party markets. The two sides reached a series of

new agreements on deepening economic and financial cooperation. Building on

this, both sides committed to continue to strengthen the mechanism to support the

further development of a "Golden Era" of UK-China relations.

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I. MACROECONOMY AND GLOBAL ECONOMIC GOVERNANCE

1. Both sides note that global economic momentum is softening, and while the

shift in the policy outlook may provide support, near-term risks, notably from

global trade tensions, remain. Both sides will continue working closely

together and with all international partners to strengthen macroeconomic

policy coordination and promote openness to achieve the shared goal of

strong, sustainable, balanced and inclusive global growth.

2. Both sides agree on the importance of transparency of economic

policymaking to enhance policy credibility, and the value of open exchanges.

Both sides agree to establish a joint expert group, bringing together Chinese

and UK economists, to provide insights into areas of mutual interest, and

commit to produce further joint policy research between HM Treasury and

the Ministry of Finance, building on the recent joint research on budget

performance management.

3. China welcomes the UK’s committment to boosting employment and

increasing productivity, so as to sustainably improve living standards in the

long term. China also supports the UK’s commitment to reducing government

debt, while supporting public services, and investing in the economy and

infrastructure. As the UK prepares to leave the European Union, the UK will

remain open to foreign investors around the globe. The UK welcomes China’s

commitments on economic reform and opening up, and progress achieved to

date. The UK supports China’s increasing focus on high quality development,

and welcomes further efforts to promote structural deleveraging, allow the

market to play a decisive role in resource allocation, further pursue supply-

side structural reform, and promote the steady growth of consumption. Both

sides agree on the importance of boosting productivity to secure future

prosperity.

Multilateral cooperation

4. The UK and China agree to continue to work together to address major global

economic challenges. Both sides reaffirm their commitment to the rules-based

international economic system, and to the international economic and

financial organisations that underpin it. Both sides commit to continue to

work closely through the G20 as the premier forum for international economic

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cooperation. Both sides commit to implement the outcomes of the Hangzhou,

Hamburg and Buenos Aires Summits, including building an open world

economy, improving the multilateral trading system, and promoting

international cooperation in areas including structural reform, opportunities

and challenges presented by the digitalised economy, sustainable

development, enhancing international financial architecture, financial sector

issues, high-quality and sustainable infrastructure investment, and anti-

corruption.

5. Both sides are willing to strengthen communication and cooperation on

international development, promote global poverty reduction, jointly address

global challenges, such as public health and climate change, according to

common and differentiated responsibilities and promote global growth and

development in developing countries in particular. Both sides reiterate

commitment to the 2030 Agenda for Sustainable Development and the Paris

Agreement and strengthen communication and cooperation on their

implementation.

6. Both sides support the International Monetary Fund (IMF) and World Bank

as key pillars of global economic governance:

i) both sides support maintaining a strong, quota-based and adequately

resourced IMF to preserve its role at the centre of a strengthened global

financial safety net. Both sides agree to promote the completion of the

15th General Review of Quotas (GRQ) no later than the 2019 Annual

Meetings. Both sides call for the IMF board to reach agreement on IMF

resources and governance reforms. We reaffirm that any realignment

of quota shares as part of a GRQ is expected to result in increased quota

shares for dynamic economies in line with their relative positions in the

world economy, and hence likely in an increase in the share of

emerging market and developing countries as a whole. Both sides

support the IMF’s efforts to improve the international monetary system

by examining possible broader use of Special Drawing Rights (SDR).

ii) both sides support the World Bank Group (WBG) to complete the

implementation of capital package for IBRD and IFC following the

agreed principles. Both sides support the WBG’s efforts to end extreme

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poverty and boost shared prosperity, ensure no-one is left behind and

respond to global challenges, including fragility, crises, climate change

and regional integration. Both sides welcome the WBG’s progress

against the Forward Look and expect further progress in all areas,

including better serving all clients, leading on the global public goods

agenda, creating markets and continually improving the business and

operational model. Both sides welcome ongoing discussions on the

replenishment of IDA, and call on the WBG to strengthen emphasis on

jobs and economic transformation in IDA countries, one of the IDA19

special themes.

7. Both sides recognise and support the ongoing work of the Paris Club, as the

principal international forum for restructuring official bilateral debt, towards

the broader inclusion of emerging creditors. Creditor coordination is

important for ensuring timely and effective debt restructurings when

borrowers enter distress.

8. Both sides agree to maintain close cooperation in the field of multilateral

taxation to combat cross-border tax evasion and avoidance, and prevent tax

Base Erosion and Profit Shifting (BEPS). Both sides agree to continuously

support the implementation of the G20 standards for international tax

transparency including automatic exchange of information. Both sides will

continue to contribute to the OECD work on addressing the tax challenges of

the digitalised economy and work together to create a fair and transparent

international tax environment.

9. Both sides welcome the important progress made by the AIIB, and expect the

AIIB to continue expanding its business and enhancing its international

influence in the year of 2019. Both sides welcome the AIIB’s inaugural global

bond issuance in London, reaffirm their commitment to the AIIB's shared

vision, and will continue to strengthen all-round cooperation and partnership

under the framework of the AIIB.

10. Both sides recognise the unique potential of the proposed Multilateral

Cooperation Centre for Development Finance as a mechanism for bringing

together multilateral institutions, recipient governments, and other investors

to promote the use of international standards and increase high quality

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infrastructure and connectivity investments in developing countries. By

promoting information sharing, project preparation, and capacity building,

the multilateral development banks should support sustainable infrastructure

development and connectivity programmes and help to promote the use of

international standards on transparency, debt sustainability, environmental

impact including carbon emissions, and social impact. Subject to continuing

discussions on governance, project standards and development impact, the

UK will consider supporting the MCDF Financing Facility.

II. TRADE, INVESTMENT AND MAJOR PROJECT COOPERATION

Future UK-China Trade Relationship

11. Both the UK and China, as outward-looking global trading nations, support a

modern, comprehensive trading relationship fit for the 21st Century. Both

sides fully confirm the important role played by the China-UK Joint Trade

and Economic Committee (JETCO) in promoting bilateral trade and

investment and look forward to the convening of the 14th session of the

JETCO in the UK later this year. Both sides agree JETCO is an opportunity

to keep up momentum on our future and global trade objectives and to deliver

market access results. Both sides welcome progress made so far through the

Trade Working Group discussions under the JETCO to explore future

opportunities for further collaboration following the UK's exit from the EU,

consistent with both sides' relationship with the EU. Both sides will step up

efforts to conclude the UK-China Joint Trade and Investment Review.

12. Both sides fully recognise the importance of strengthening economic

cooperation and working relationships at the regional and local level and of

creating synergy between the UK’s and China’s regional industrial strategies,

including through the China-UK Region to Region Working Group. Both

sides will broaden collaboration, including efforts to increase practical trade

and investment cooperation, exploring opportunities for trade and investment

missions, facilitating national and local governments to identify peer partners

to drive pragmatic and ongoing cooperation in the development of their

industrial sectors, and exploring options for stronger bilateral partnerships

within China’s regional development strategies, such as an increased UK

presence in the Greater Bay Area.

Multilateral Trade

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13. Both sides reaffirm their support for the rules-based, non-discriminatory,

open, inclusive and transparent multilateral trading system with the World

Trade Organisation (WTO) at its centre. Both sides will continue their

cooperation in the WTO, including in support of the UK's smooth transition

to full independent WTO membership with its own schedules of concessions,

ensuring minimal disruption to the UK-China trading relationship. China and

the UK will work together and with other members on WTO reform to

improve the WTO in its three functions (rule making, dispute settlement,

monitoring) while upholding its core values and fundamental principles, and

tackle current and future global trade challenges. Both sides commit to:

(i) ensuring full compliance with WTO obligations, including

transparency and notification commitments;

(ii) strengthening efforts to help de-escalate global trade tensions and

working to resolve the current crisis at the WTO Appellate Body as

a priority;

(iii) welcoming the commitment made at the EU-China Summit to

“intensify the discussions with the aim of strengthening international

rules on industrial subsidies”; and

(iv) updating the WTO rulebook to better address 21st century trade

issues, including on e-commerce, trade in value added, and services

trade.

14. Both sides recognise the mutual benefits to be derived from membership of

the Government Procurement Agreement (GPA). The UK supports a renewed,

ambitious application from China to join the GPA as soon as possible. Both

sides agree to strengthen the communication and cooperation on government

procurement.

15. Both sides welcome the first China-UK dual-use export control dialogue held

in London last December, and are pledged to continue the bilateral dialogue

on export control of dual-use items.

16. The General Administration of China Customs and Her Majesty’s Revenue

and Customs reiterate their commitment to implementing their 2015 and 2018

MOUs along with Port Twinning as indicated in the Exchange of Note signed

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in London in November 2018; previous EFD outcomes; and to exchange

information, including intelligence, risk and trend information and risk

analysis indicators, with the aim of preventing, detecting, suppressing and

investigating breaches of customs laws and to provide feedback on the

outcome of intelligence, information and assistance provided. Both sides will:

(i) cooperate to ensure the provision of guidance to Chinese and UK

businesses in relation to appropriate national customs legislation, to

ensure the facilitation of a legitimate, compliant, transparent,

enabling and predictable trading environment.

(ii) seek to complete in advance of the UK leaving the European Union

(EU), the negotiation and entry into force process on transitioning

the EU-China Customs Cooperation and Mutual Administrative

Assistance (CCMAA) Agreement to a new UK-China CCMAA

agreement and agree to promote Authorised Economic Operators

(AEO) Mutual Recognition between the two countries’ customs

authorities.

(iii) explore opportunities to advance and expand UK-China Port

Twinning beyond the completion of the current Port Twining

Arrangement which is due to finish in August 2019.

Business Environment

17. Both sides agree that stable, fair, non-discriminatory, and transparent business

environment and ensuring a level playing field is crucial to the promotion of

China-UK economic and trade cooperation. Both sides will enhance

cooperation in this field.

(i) Both sides recognise that competititive neutrality principle is an

important principle that ensures enterprise under all forms of

ownership are treated equally in areas such as market access and

licences, business operations, and government procurement;

(ii) Both sides welcome the progress made by the China-UK

Standardisation Cooperation Commission and commit to

strengthening cooperation on adopting international standards, in

particular through expanding the list of mutually recognised

standards. Both sides welcome each other’s businesses and other

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interested parties to participate in related standardisation activities

in each other’s countries.

(iii) Both sides reaffirm their commitment that technical standards and

guidelines regarding data security should be open and transparent.

Investment and Market Access

18. Both sides are committed to promoting an open, fair and non-discriminatory

investment environment, safeguarding the legitimate rights and interests of

investors, implementing an appropriate, stable and predictable regulatory

framework, and developing a reasonable and proportionate regime to review

investment for risks to national security. In addition:

(i) both sides will broaden and deepen the UK-China investment

partnership, based on agreed principles, recognising the economic

value of investment, reducing and clarifying restrictions, protecting

investors and ensuring level playing fields between domestic and

foreign companies.

(ii) China will implement its commitments to promote further opening

up of services, manufacturing and mining in the next revision of the

current Negative List.

19. The UK and China will cooperate to agree a bilaterally recognised list of

investment projects in which both governments support investment by each

other’s companies. China will ensure that UK companies can legitimately

repatriate profits made in China back to the UK.

20. To achieve further opening up, China agrees to expand market access in the

following areas of goods trade:

(i) both sides welcome the signing of the protocol for the export of UK

beef to China, with a view to approving beef export to China by the

end of 2019.

(ii) China agrees to send experts to the UK to carry out technical

exchanges on scrapie by autumn 2019, in order to study and

formulate evaluation criteria for ban-lifting on UK lamb exports;

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(iii) both sides agree to continue to promote the lifting of the Avian

Influenza ban on British poultry and poultry products;

(iv) both sides welcomes the recent approval and registration of UK pork

plants, and look forward to further approval of qualified UK pork

plants by the end of the 2019, to enable exports based on market

demand;

(v) both sides agree to strengthen communication and cooperation on

the research and application of alternatives to animal testing on

cosmetics. Both sides agree to work together so that cosmetics

products exporters can meet import regulations and standards. Both

sides will review progress at the next appropriate ministerial

opportunity; and

(vi) both sides welcome UK and Chinese enterprises to make investment

into each others’ biofuel markets.

21. Both the UK and China recognise the crucial role played by services in each

other's economies, including the role of services liberalisation to promote

high quality development, and agree to a high level of ambition for future

services cooperation. Both sides agree to enhance collaboration on the

opening up of China’s services sector and expand services trade, including as

part of the bilateral Trade in Services Working Group as part of the Joint

Economic and Trade Commission.

(i) Both sides agree to promote cooperation on accounting standards,

and promote cross-border cooperation on accounting supervision.

The UK and China welcome recent research and collaboration

between the Ministry of Finance, the World Bank, the Association

of Chartered Certified Accountants and the Shanghai National

Accounting Institute to support the international growth and

development of China’s CPA profession.

(ii) As per the recently signed MoU between MOHURD and DIT, to

enhance bilateral trade and investment in each other’s infrastructure

sectors, both parties will cooperate to confirm the areas of the

construction market that can be opened to each other’s companies.

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(iii) Both sides agree to work together to pursue Chinese government

recognition of UK Further Education Colleges as well as more

English tests offered by British ELT providers.

III. FINANCIAL REFORM AND FINANCIAL MARKET

DEVELOPMENT

Financial regulatory cooperation

22. The UK welcomes the breakthroughs made in the opening up of China’s

financial sector since the 9th EFD. China recognises that the City of London

is the world’s leading global financial centre and remains China’s partner of

choice for financial services collaboration. Both the UK and China welcome

the outcomes from the previous UK-China Financial Services Summit, and

agree to consider and take forward recommendations from the Summit and

encourage UK and Chinese business to further deepen collaboration.

23. Both sides welcome the second meeting of the Bank of England and People’s

Bank of China Joint Symposium as a forum to discuss macro-prudential

frameworks and green finance and to further support UK-China regulatory

cooperation. Both sides agree to strengthen cooperation on anti-counterfeit

currency. Both sides agree to enhance dialogue on central bank digital

currencies and the implications of innovations in crypto-assets and stable

coins. Recognising China’s priority to strengthen financial consumer

protection and the UK’s financial consumer protection expertise, including

the UK’s Financial Ombudsman, both sides agree to cooperate on this area.

24. The UK welcomes China’s Presidency of FATF and looks forward to

strengthening cooperation on the implementation of China’s FATF

presidency priorities in the coming year. Both sides agree to actively work

towards signing an MoU on Anti-Money Laundering Cooperation between

People’s Bank of China (PBoC) and FCA and continue to work on an MoU

on information and intelligence exchange on Anti-Money Laundering (AML)

and Countering the Financing of Terrorism (CFT). Both sides agree to

continue to maintain close cooperation and agree to collaborate on the role of

financial and regulatory technology in the context of anti-money laundering.

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Capital Markets

25. Both sides agree to support further internationalisation of the RMB and

recognise the unrivalled depth and liquidity of London’s markets. Both sides

agree to enhance cooperation on capital market connection, financial market

infrastructure and regulation and cross-border use of RMB. Both sides agree

to continue to promote the China-UK cross-border RMB business and support

the use of RMB as the settlement currency in bilateral trade and investment.

Both sides commit to support UK RMB clearing banks to expand business,

continue to promote development of the off-shore RMB market in London,

and encourage innovation of RMB-denominated financial products. Both

sides agree to promote RMB bonds as common qualified collateral accepted

by the UK market. China welcomes more qualified British commercial banks

and market infrastructure companies to join Cross-border Interbank Payment

System.

26. Both sides recognise that British institutional investors are among the biggest

QFII and RQFII players, and agree to continue cooperation to help British

investors take full advantage of QFII and RQFII schemes. China welcomes

British investors to invest in China’s capital market via QFII, RQFII, Stock

Connect and other channels. China agrees to allow greater access for qualified

UK financial institutions to China’s commodity futures markets and to

approve and issue QFII and RQFII quotas for UK groups.

27. Both sides welcome the official launch of the London-Shanghai Stock

Connect and the listing of Global Depository Receipts (GDR) on the London

Stock Exchange (LSE) by Huatai Securities as the first GDR product under

the London-Shanghai Stock Connect and welcome qualified LSE-listed

companies to list China Depositary Receipt (CDR) on Shanghai Stock

Exchange. Both sides welcome the signing of MoU on regulatory cooperation

between the CSRC and FCA for the purpose of supporting the smooth

operation of London-Shanghai Stock Connect after its launch. Both sides

agree to promote bilateral audit oversight cooperation based on each other's

domestic laws and regulations, and to reach an audit oversight cooperation

agreement as soon as possible. Both sides agree to take the official launch of

the London-Shanghai Stock Connect as a good opportunity to deepen bilateral

securities and audit oversight cooperation. Both sides welcome qualified

companies to list in each other’s capital market so as to support sound and

stable development of the real economy in both countries. Both sides

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welcome the continued cooperation under the alliance between LSE ELITE

programme and the Shenzhen Stock Exchange V-Next. Following the second

ELITE company roadshow, both sides look forward to welcoming Chinese

companies to London enabling them to forge links with ELITE’s community

and actively explore the construction of cross-border equity investment and

financing functions.

28. Both sides welcome progress made by the UK-China Bond Connect Working

Group. To better enable connectivity, both sides agree to continue the

feasibility study on UK-China bond market connect arrangement, including

the potential extension of CFETS trading hours. The UK welcomes feasibility

studies on the fungibility across QFII/RQFII, CIBM Direct and Bond Connect.

Both sides support qualified Chinese-funded custodian banks to provide bond

custodian services for investors. The UK welcomes developments in the

opening-up of China's bond market, and both sides welcome active

consideration by FTSE Russell on inclusion of China's bond market into its

World Government Bond Index. Both sides welcome the National

Association of Financial Market Institutional Investors (NAFMII) and the

International Capital Market Association (ICMA) to further deepen

cooperation under the framework of their MoU.

29. China welcomes qualified British banks to develop lead underwriting

business for non-financial debt instrument in the China Interbank Bond

Market (CIBM). The UK welcomes China to consider issuing sovereign

bonds and RMB PBoC bills in London and the Bank of England will consider

their inclusion into its eligible collateral list. China welcomes qualified British

enterprises to issue panda bonds, and is willing to build practical audit

regulatory cooperation mechanisms regarding bond issuance with the UK.

30. Both sides welcome the progress made by the UK-China Close-out Netting

working group over the last year. The UK supports China’s continued efforts

to explore the way forward to clarify close out netting within the existing legal

and regulatory framework. Both sides encourage cooperation between

financial market infrastructure including OTC derivatives markets and work

towards an equivalence decision of each other’s regulatory frameworks for

central counter parties. Both sides support cooperation between CFETS and

IHS Markit to provide post-trade processing services for cross border OTC

derivatives transactions.

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31. Both sides welcome the establishment of a Capital Markets Working Group

between financial participants of the two countries. Both sides agree to

discuss connection of the two capital markets under this framework, and

welcome recommendations to further increase foreign participation in

China’s capital markets.

32. China welcomes UK eligible financial institutions to set up majority

ownership securities, futures, and fund management companies in China,

subject to China’s opening-up commitments. Both sides welcome qualified

UK firms to take part in the competitive negotiation to ship gold domestically

for the Shanghai Gold Exchange. Both sides welcome the application of the

Chinese subsidiary of Standard Chartered Bank to become a member of

Shanghai Futures Exchange, in accordance with applicable Chinese laws and

regulations. China welcomes qualified British financial institutions to

actively participate in the trade of designated products opened to foreign

investors including crude oil, iron ore, and PTA. The financial regulatory

agencies of both countries agree to enhance their cooperation on cross-border

supervision and enforcement in derivatives sector and welcome futures

exchanges in both countries to be registered by each others’ regulators in

accordance with laws and regulations.

33. The UK and China welcome the opening of the Shanghai Stock Exchange

representative office in London. China and the UK agree to deepen

collaboration on foreign exchange markets. Both sides support financial

technology companies in the UK to participate in the development of

CFETS’s G10 market, welcome XTX Markets to become the first foreign

non-bank market maker on CFETS’s G10 market, and actively prepare for

such cooperation.

Banking

34. Both sides support Industrial Bank to establish a representative office in

London. Both sides welcomed China CITIC Bank’s upgrading of its

representative office to a branch. Both sides welcome the opening of the

representative office of the China Banking Association in the UK.

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35. Recognising the UK’s experience in providing equity finance to SMEs

through the Business Growth Fund (BGF), both sides agree to work together

to conduct research and share experiences in this field.

Asset Management

36. The UK welcomes China’s decision to broaden the scope of permitted PFM

business, which includes: providing investment suggestion services to

affiliated companies or third parties. Both sides welcome further discussion

on the extension of the ‘One plus One rule’ to cover qualified foreign financial

institutions. China welcomes eligible foreign managers to convert their PFM

WFOEs into an FMC, whilst allowing for continuity of business. Both sides

look forward to the findings of the feasibility study into the UK-China mutual

recognition of funds programme.

37. The UK welcomes the continued issuance of QDLP and QDIE licences to

qualified UK institutions. The UK welcomes China’s reform to improve the

management of the QDII quota/RQDII system, and expects qualified Chinese

institutions to take advantage of these schemes to invest in related financial

instruments in the UK.

38. The UK side welcomes China Investment Corporation’s efforts to open its

London office. Both sides welcome the initiative of China Investment

Corporation (CIC) and HSBC, with their partner Charterhouse to set up the

UK-China Cooperation Fund, which will invest high-quality UK companies

and help them explore business and market potentials in China.

39. Both sides welcome qualified UK financial institutions, when compliant with

relevant registration requirements, to be registered by AMAC as a WFOE or

joint PFM, investment suggestion service providers and fund accounting and

transfer agency private fund service provider.

Insurance and Pensions

40. Both sides welcome qualified British insurers to set up wholly-owned

insurance holding companies in China, and welcome Chinese insurers and

reinsurers to carry out reinsurance business in the UK. Both sides welcome

and support communication and cooperation between the insurance

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associations from China and the UK. Both sides welcome the study on

pension scheme reform in China with the Ministry of Human Resources and

Social Security, learning from UK regulatory and commercial experience.

The UK and China will collaborate on exploring possibilities of auto-

enrolment pilots of the second pillar of the pension system in China.

41. Both sides welcome discussion on the possibility of investing pension assets

in offshore markets. Both sides welcomed the approval of establishment of

HASL Pension Insurance Company Limited. China welcomes HASL Pension

Insurance Company Limited to participate in the bidding process for an

annuities licence. UK welcomes China’s newly announced opening-up

measures, including allowing foreign business to own up to 51% of shares in

life insurance joint ventures and phase out the cap over 3 years (2021). China

welcomes UK insurance companies to submit applications in line with the

relevant laws and regulations.

FinTech

42. Both sides expect to strengthen cooperation under the framework of China-

UK Fintech Bridge. Both sides agree to provide a facilitating policy

environment for Fintech enterprises’ development in both countries’ markets,

and for them to serve the real economy in joint efforts with incumbent

financial institutions. Both sides agree to improve cooperation between

regulators, including through the fintech secondee programme, and share

experiences on Open Banking, Sandbox, Pilot project and Trial mechanism.

Both sides agree to provide sustained guidance to Fintech enterprises in terms

of compliance, data security and privacy. Both sides support financial

institutions and Fintech enterprise of both countries to enhance cooperation,

to provide innovative solution for global digital economy, especially for

digital financial inclusion in developing countries. The PBoC and the

Financial Conduct Authority (FCA) agree to sign the MOU on Non-bank

Payment Institution Supervision, to enhance cross-border regulatory

collaboration and information sharing on payment institutions. Both sides

welcome the signing of MOU between the National Internet Finance

Association of China and Innovate Finance. Both sides welcome the planned

collaboration between NIFA and UK PE/VCs to promote communication and

cooperation between Fintech companies from both countries.

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43. Both sides agree to actively work together to ensure smooth transition for

Chinese financial institutions in the UK during the EU withdrawal process.

Both sides welcome the proposed collaboration between NIFA and UK

Fintech companies including Brismo to help promote the sustainable

development of the Chinese P2P market. China welcomes the applications of

eligible UK Fintech companies for non-bank payments licenses. China

welcomes qualified UK financial institutions in China to apply for a licence

to distribute funds.

Green Finance

44. The UK and China restated their recognition of each other as their primary

partner in green finance, for capital raising, product innovation and thought

leadership. Both sides welcomed the significant progress made by the UK-

China Green Finance Taskforce. Both sides welcomed the launch of the UK-

China Green Finance Centre in London, which will form a key function of

the UK’s Green Finance Institute once established. Both sides welcome and

support the work of the UK PACT China Green Finance Programme on green

finance capacity building in China and beyond. Working with the UK-China

Green Finance Taskforce the Programme will: support the Global Green

Finance Leadership Programme; work on harmonisation of green standards;

broaden the TCFD alignment work to more sectors; further work to

demonstrate that green finance is cost effective; develop innovative products;

focus on capacity building at provincial/city level; and support initiatives to

green Belt and Road investments.

45. Both sides welcome the launch of the Green Investment Principles, an

important initiative that will contribute to the greening of infrastructure and

other investments. Drawing on the two countries’ green finance expertise and

leadership, both sides agree to bolster robust implementation and governance

of the principles by establishing a secretariat with offices in London and

Beijing. The secretariat will support signatories to share their knowledge and

collectively raise ambition for green, low-carbon and climate-resilient

investment. Both sides agree to accelerate cooperation to scale-up

investments in green and sustainable technologies through the London-

Beijing Green Technology Investment Gateway in Tongzhou, Beijing and

London. Both sides will create investment platforms driven by the private

sector to support and invest in UK green technology firms to scale-up in new

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markets, including China. Both sides welcome the collaboration between UK

and Chinese financial institutions on the issuance of offshore green asset-

backed securities in the UK and other markets.

46. Both sides support the work of the Central Banks and Supervisors Network

for Greening the Financial System (NGFS), and welcome best practice

sharing between the Bank of England and PRA, and the PBoC and CBIRC in

enhancing regulatory oversight in managing environmental and climate-

related risks. The UK government and the Chinese side are committed to

embedding consideration of climate risk in the financial system. Both sides

also recognise the need to explore whether financial disclosures should be

expanded to other environmental considerations beyond climate, such as the

environment and ecosystems. Both sides recognise the importance of

promoting the development of international standards on sustainable finance.

IV. STRATEGIC AND NEW AREA COOPERATION

The Belt & Road Initiative, infrastructure & third market cooperation

47. The UK recognises the potential for the Belt and Road Initiative to contribute

to prosperity and sustainable development in participating countries. China

welcomes the active participation of the UK government and business

community in the BRI, including UK attendance at the BRI Forum in April

2019. China recognises the value of UK engineering, legal and financial

services in support of sustainable infrastructure projects in third markets. Both

sides agree to facilitate market-led cooperation in third markets in line with

G20 Principles for Quality Infrastruture Investment and the Debt

Sustainability Framework for Participating Countries of the Belt and Road

Initiative.

(i) Both sides will encourage the sharing of information about potential

projects for UK-China cooperation in third markets. To facilitate this,

both sides welcome the signing of the DIT-NDRC MoU on third market

cooperation.

(ii) Both sides welcome the launch of the UK Prosperity Fund

Infrastructure Programme and will undertake technical cooperation,

joint research, pilot projects, investment facilitation and pipeline

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development with the aim of delivering sustainable, bankable

infrastructure projects in third markets.

(iii) Both sides agree to develop a three year work-plan to promote practical

cooperation to deliver projects in the field of infrastructure in third

markets in support of the development objectives of host countries.

(iv) China and the UK will continue to hold investment and business forums

under the framework of Partnership for Investment and Growth in

Africa (PIGA), to help African countries to improve their supply

capacity and better integrate into the global value chain.

48. Both sides recognise that addressing global infrastructure needs will require

crowding-in of private finance.

(i) Both sides welcome the appointment Dr Zhu Min, as China’s

counterpart to HM Treasury’s Professional and Financial Services

Envoy for the Belt and Road Initiative. Both sides welcomed the UK

BRI Expert Board position paper, and will explore future cooperation.

(ii) Both sides agree to explore financing mechanisms to crowd-in private

investment to the BRI. As part of these mechanisms, China welcomes

qualified British enterprises to issue RMB BRI bonds in China and both

sides welcome ICBC as the first Chinese bank via its London Branch to

make use of a green loan to support green projects and promote

cooperation in green finance.

(iii) Both sides encourage the City of London Corporation and Beijing

Municipal Government to explore collaboration for the Belt and Road

Initiative, to promote dialogues between the British and Chinese

business communities and jointly support cooperation on BRI projects

in third markets.

(iv) The UK and China agree to further collaborate on using the expertise

of the Private Infrastructure Development Group (PIDG) in upstream

early stage project development and joint debt financing of private

infrastructure projects in Africa and Asia.

(v) Both sides welcome the signing of a memorandum of cooperation

between the Export-Import Bank of China and the UK Export Finance

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to support Chinese and UK exports in third party markets. China

welcomes UK financial institutions to actively participate in the Belt

and Road Inter-bank Regular Cooperation Mechanism initiated by

Industrial and Commercial Bank of China, and enhance third market

cooperation under this framework.

Industry and Innovation

49. Both sides welcome the achievements of the Ministerial Exchange between

NDRC and the UK. The two sides will hold the seventh Ministerial Exchange

in London this June, and have in-depth exchanges on macro-economic

performance and policy, investment and third market cooperation, and

challenges of ageing society.

50. Both sides agree:

(i) the importance of supporting role that science and technology plays in

socio-economic development, through the UK-China Joint Strategy for

Science, Technology and Innovation Cooperation, launched in 2017

and are willing to further implement the Joint Strategy together,

including the Agri-tech and Healthy Ageing Flagship Challenges;

(ii) areas for future cooperation following the 9th UK-China Joint

Commission Meeting on Science, Technology and Innovation

Cooperation held in London in November 2018, including agreement

to extend the UK-China Research and Innovation Partnership Fund

focusing on jointly tackling global challenges, and strengthening

scientific and research cooperation in the areas of both sides’ interests;

(iii) to reaffirm that they welcome international students and academics to

do studies in each other’s country;

(iv) to promote UK-China space cooperation based on the outcomes of the

2018 UK-China Space Workshop, which will identify a roadmap of

cooperation with projects that are in the common interests of both sides.

The UK-China Science and Technology Joint Laboratory will continue

to provide an important platform for both sides to communicate in the

space field. Both sides look forward to discussing emerging areas of

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mutual interest such as space debris management and the norms of

behaviour in space to ensure a sustainable outer space environment;

(v) to support the continued cooperation on the Solar Wind Magnetosphere

Ionosphere Link Explorer (SMILE) mission under the framework of

China-ESA space cooperation framework; and

(vi) that both sides are satisfied with the cooperation on the agriculture

remote sensing projects, and agree to consider signing a Memorandum

of Understanding between the China National Space Administration

and the Science and Technology Facilities Council on Cooperation in

the Space Science Activities.

51. The UK and China recognise the important role of intellectual property (IP)

in promoting technological innovation, economic growth, trade and

investment. Both sides agree to strengthen IP cooperation and mutual

understanding to provide better services for users of IP systems and the

general public in both countries. The 2019 UK-China IP Symposium will be

held in China and will further promote understanding of IP systems among,

and dialogue between, businesses, researchers and policymakers from both

countries. The UK and China will also exchange views on issues of mutual

interest, including:

(i) improvements to the patent, design and trademark systems, including in

respect of the quality and timelines of examination and enforcement

actions; and of work sharing mechanisms;

(ii) strengthening of the copyright legal framework, collective licensing,

and copyright enforcement;

(iii) sharing of information, intelligence and feedback to further develop the

combating of online piracy and counterfeiting; smoother links between

on and off-line enforcement; and cross-border law-enforcement

cooperation;

(iv) the importance of flexibility for participants in collaborative research

projects or cross-border technology commercialisation to negotiate IP

agreements;

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(v) consistency in the granting, administration and enforcement of IP rights

nationwide; and

(vi) the impact of future technologies on IP rights, and the utilisation of IP

rights and public services in IP.

52. On digital policy, cyber security, AI and internet governance, both sides agree

to:

(i) take forward the commitments made at the 2019 China-UK Internet

Roundtable. Both sides recognise that technical standards and

guidelines regarding data security should be open and transparent;

(ii) ensure a security-first approach to the development of new technologies;

(iii) work to understand the impact that new technologies including AI and

big data will bring. Both stress the importance of prioritising and

supporting an innovation-friendly economy that supports the

responsible growth and ethical deployment of new technologies;

(iv) reaffirm their commitment to enhance policy cooperation and

experience sharing on digital transformation.

53. The UK welcomes Chinese companies to participate in the bidding of UK rail

projects, including HS2. Both sides support the UK-China Railway Joint

Working Group to promote cooperation in China, the UK, and in third

countries under commercial principles.

54. Both sides reiterate their commitment to a BEIS-MIIT Dialogue to explore

areas of collaboration in both countries’ industrial strategies, enhancing

exchanges for standards, regulations and policies and practical cooperation in

the fields of automotive (especially in new energy vehicles and intelligent

connected vehicles), aviation (in the framework of the UK-China Joint

Economic and Trade Committee), green manufacturing, intelligent

manufacturing and digital economy.

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55. Both sides agree to enhance the exchange between the governments and the

automotive industries, by organising consultative sessions on policies and

regulations. Both sides agree to follow up from the 2018 UK Zero Emission

Vehicle Summit to advance the development of NEVs, and promote a wide

application of NEVs and achieve respective development and low CO2

emission goals, with various measures including collaboration on battery

technology, the roll out of charging infrastructure. Both sides welcome the

industries from both countries to prepare to establish the UK-China Joint

Automotive Innovation Centre. China is willing to work proactively in

achieving the goals of strategic development plan for NEVs, and increase the

proportion of NEVs for government and public institutions procurement. The

UK side commits to all new cars and vans being effectively zero emission by

2040, and make the Government fleet of vehicles 100% Ultra-Low Emission

Vehicles (ULEV) by 2030 as well as encourage business with large vehicle

fleets to commit to the same target. Both sides agree to work together to

promote international best practice sharing on NEVs. Both sides are willing

to promote the development of ICV technology and its industrialisation,

enhance exchanges on the formulation and coordination of intelligent

connected vehicles’ regulations under the framework of WP29, carry out the

test and validation in closed fields and on public roads, and encourage

discussions on practical application and business models in different

scenarios.

56. Both sides support the establishment of “China-UK Industrial Cooperation

Partnership (ICP)” initiated jointly by Center for International Economic and

Technological Cooperation of the Ministry of Industry and Information

Technology of China (CIETC), Confederation of British Industry (CBI) and

China-Britain Business Council (CBBC). ICP encourages the industries from

both countries to share best practices, establish business network and

cooperation industrial clusters.

57. Regarding cooperation in the creative and sports sectors:

(i) both sides recognise the increasingly important role that the cultural and

creative sector plays in promoting economic and social prosperity and

the wider development of the two countries. The Cultural Exchange

Agreement from 2019-2023, based on the Agreement on Educational

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and Cultural Cooperation signed in 1979, is a powerful signal to show

that both sides are committed to further cooperation in the field of

cultural and creative industries and are committed to sustainable

development, cultural protection and exchanges and cooperation for the

future; and

(ii) the UK welcomes deepened collaboration between the UK and China

on the Beijing 2022 Winter Olympic and Paralympic Games, including

through the implementation of the MoU signed between them in 2016.

The UK acknowledges China’s efforts to grow grassroots and elite

football and the wider development of the sports industry in China. The

UK’s strengths in the sports economy, and particularly football, offers

the opportunity for cooperation.

58. Both sides reaffirm their shared commitment to tackling the global problem

of AMR and progress made under the joint call of 2018 between China’s

Ministry of Science and Technology and the UK’s Department of Health and

Social Care. Both sides agree to continue to implement the China-UK MoU

on Health Cooperation signed in 2016, prioritising cooperation on health

policy, medical science and research and global health. Both sides welcome

ongoing cooperation in the fields of primary care, oncology, patient safety

and look forward to the fifth health policy dialogue.

59. Both sides are ready to further strengthen cooperation in rural development,

agriculture green development, and farmers’ cooperative organisations.

Particularly promoting policy, technology, and personnel exchange in such

areas as rural development planning, infrastructure development, agri-

tourism and eco-friendly agriculture. Both sides are ready to further

strengthen science and technology cooperation in agriculture, with the

support of the China-UK Sustainable Agricultural Innovation Network (SAIN)

and encourage more agricultural research and educational institutions to

conduct collaborative research in advanced agricultural technologies, so as to

deliver stronger science and technology support to agricultural development.

60. Both sides agree to explore cooperation on the UK government’s Prosperity

Fund China programmes, which aim to foster sustainable inclusive economic

growth in China and/or third countries, closer cooperation on global

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challenges and greater trade and investment. In particular, both sides

welcome and support the following programmes: Infrastructure; Energy and

Low Carbon Economy; Financial Services, on which both sides signed an

MoU; Business Environment; Health Programme; Skills Development;

Future Cities; and Global Partners.

Energy

61. Both sides welcome the convening of the 6th UK-China Energy Dialogue,

Offshore Wind Industry Advisory Group Meeting, and UK-China Civil

Nuclear Energy Working Cooperation Group Meeting, and commit to the

joint implementation of the Clean Energy Partnership Work Plan for 2019-

2020. Both sides support mutually beneficial and pragmatic cooperation in

areas including Clean Technologies, Pathways to a Clean Energy Transition,

System Reform and International Governance and Engagement.

62. Both sides attach importance to cooperation in the field of civil nuclear energy,

and are willing to ensure the China-UK Civil Nuclear Energy Cooperation

Working Group is meaningful and mutually beneficial, in a bid to deepen

existing cooperation, including on Hinkley Point C, Sizewell C and Bradwell

B and especially welcome the progress being made in construction of Hinkley

Point C and recognise the investment and track record of experience China is

bringing to support this project. Both sides recognise the potential for further

mutual beneficial commercial partnerships in the UK and China. Cooperation

in new fields and new projects, including nuclear energy supply chain, nuclear

environmental protection will also be sought by both sides.

63. Both sides recognise the importance of and the benefit from cooperation of

nuclear waste management and decommissioning for sustainable

development of both countries and encourage commercial collaboration

between respective enterprises under the MoU concerning Enhancing

Cooperation in the Fields of Civil Nuclear Industry Fuel Cycle Supply Chain.

64. Both sides welcome the progress on the HPR1000 Generic Design

Assessment (GDA) and the continuation of the GDA technical exchange

based on the agreement on government to government assurance, in line with

the China-UK Intergovernmental Agreement on Peaceful Uses of Nuclear

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Energy Cooperation, and the Nuclear Suppliers Group Guidelines. Both sides

agree to efficient and timely processing of all export controls applications

relating to the export of nuclear materials, equipment and technology. Both

parties expressed a desire to support joint research in civil nuclear energy,

compatible with Government funding regulations in both markets,

government priorities for civil nuclear research in both markets, and mutually

acceptable arrangements on the treatment of intellectual property.

65. Both sides agree to work together to deepen the clean energy partnership, and

support a structured energy transition, reducing the proportion of coal

consumption and increasing the proportion of non-fossil energy consumption.

Both sides will take steps to support the design and implementation of

competitive, transparent and well regulated gas and electricity markets, to

faster deploy and integrate variable renewable energy including offshore wind,

to accelerate the reduction of high carbon resource in the energy mix, and to

work together internationally including in third markets to support the global

energy transition.

66. Both sides agree that clean and sustainable projects will be prioritised in

overseas energy investment.

Climate Change & Environment

67. The UK and China underline their highest political commitment to the full,

effective and timely implementation of the United Nations Framework

Convention on Climate Change and its Kyoto Protocol as well as the Paris

Agreement, in accordance with its principles including equity and common

but differentiated responsibilities and respective capabilities, in the light of

different national circumstances. Both sides are committed to working

together to deliver successful and positive outcomes at the UN high-level

political forum and Climate Action Summit in September 2019. The UK and

China welcome the agreement of a robust Paris Agreement Work Programme

at COP24 in Katowice whilst noting the importance of finalising outstanding

work. Both sides are determined to forge ahead with further strengthened

policies and measures for the effective implementation of their respective

nationally determined contributions. The UK and China also agree to work

towards the Paris Agreement goal of making finance flows consistent with a

pathway towards low greenhouse gas emissions, and climate resilient

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development. Mobilising support and accelerating action globally will

provide all countries with significant opportunities for transitioning their

economies and enhancing competitiveness and securing the wider socio-

economic benefits of clean energy as well as building climate resilient

economies and eco-systems for sustainable development. Both sides also

agree to work together to improve the effectiveness of the Green Climate

Fund in its first replenishment period.

68. As a demonstration of the significant bilateral collaboration on the

environment and climate agenda, both sides look forward to the signing of an

expanded UK-China MoU on the Environment and Climate Change; re-

launching the working group when the MoU on Environment and Climate

Change is signed; and working together to deliver a successful Convention

on Biological Diversity. The last 18 months have seen an increase in the

frequency and severity of extreme weather events and the risks posed by

dangerous climate change to the economy and people’s livelihoods. The UK

and China intend to expand their joint work on Climate Risk Assessment and

Management.

69. The UK and China highlight the need for the success of the Fifteenth

Conference of the Parties to the Convention on Biological Diversity in

Kunming in 2020. Both sides will work together for an ambitious and realistic

post-2020 global biodiversity framework at the Conference hosted by China

in 2020. Both sides recognise the importance of cooperation in addressing

global environmental challenges, including pollution and marine plastics.

Both sides are willing to deepen cooperation on issues such as green supply

chains, halting biodiversity loss, including through nature based solutions,

CITES implementation and enforcement, combating illegal trade in wildlife

and wildlife products, sustainable forest management and combating illegal

logging and its associated trade.